Analyst’s Disclosure: I/we have a beneficial long position in the shares of GOOG either through stock ownership, options, or other derivatives. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.
Seeking Alpha's Disclosure: Past performance is no guarantee of future results. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. Any views or opinions expressed above may not reflect those of Seeking Alpha as a whole. Seeking Alpha is not a licensed securities dealer, broker or US investment adviser or investment bank. Our analysts are third party authors that include both professional investors and individual investors who may not be licensed or certified by any institute or regulatory body.
Alphabet Inc. (NASDAQ:GOOG) (NASDAQ:GOOGL) has a list of explanations for why Google Search is losing momentum, and it includes everything from currency swings and European customs rules to even the World Cup advertising calendar. The bigger puzzle: Search queries grew at their fastest pace in five years, yet revenue growth slowed sharply, raising questions about whether Google can turn rising AI-driven engagement into advertising dollars.
Alphabet is executing a massive AI-driven capex cycle, with current earnings temporarily understating long-term profitability. GOOG's Q3 revenue grew 25% YoY to $127.6B, while Cloud revenue surged 103% and operating income tripled, signaling robust underlying business momentum. Negative free cash flow and EPS misses are artifacts of front-loaded depreciation and investment; returns on new capital are estimated at 20%, well above the cost of capital.
U.S. stocks traded lower this morning, with the Nasdaq Composite falling more than 400 points on Thursday.
Following the market opening Thursday, the Dow traded down 0.42% to 52,256.49 while the NASDAQ fell 1.65% to 26,112.17. The S&P 500 also fell, dropping, 0.48% to 7,707.13.
Leading and Lagging Sectors
Health care shares jumped by 2.7% on Thursday.
In trading on Thursday, communication services stocks fell by 6.8%.
Top Headline
Alphabet Inc. (NASDAQ:GOOGL) (NASDAQ:GOOG) shares tumbled around 13% on Thursday after the company posted downbeat financial results for the third quarter.
Alphabet reported third-quarter revenue of approximately $127.58 billion, missing analyst estimates of $128.20 billion, according to Benzinga Pro. The Google parent company reported third-quarter earnings of $2.12 per share, which may not compare to estimates of $3.02 per share.
Equities Trading UP
Nuburu Inc (NYSE:BURU) shares shot up 45% to $0.26 fter the company announced it regained NYSE compliance. Shares of Netcapital Inc (NASDAQ:NCPL) got a boost, surging 38% to $1.52 after dipping 16% on Wednesday. Cemtrex Inc (NASDAQ:CETX) shares were also up, gaining 42% to $2.51 after the company reported preliminary fourth-quarter revenue of $22.7 million, up 23% from the third quarter. Equities Trading DOWN
Ocean Power Technologies Inc (NYSE:OPTT) shares dipped 43% to $0.38 after the company priced offering of up to 9,375,000 shares and warrants at $0.64/unit. Shares of Xerox Holdings Corp (NASDAQ:XRX) were down 41% to $1.64 following third-quarter results. Nexera Technologies Ltd (NASDAQ:NEXR) was down, falling 28% to $0.34 after the company announced a 1-for-5 reverse stock split scheduled to take effect Nov. 6. Commodities
In commodity news, oil traded down 2% to $100.71 while gold traded down 0.4% at $4,035.80.
Silver traded down 2.1% to $52.535 on Thursday, while copper fell 1.3% to $6.5875.
Euro zone
European shares were mostly higher today. The eurozone’s STOXX 600 rose 0.9%, while Spain’s IBEX 35 Index fell 0.3%, London’s FTSE 100 gained 0.7%, Germany’s DAX gained 1.3%, while France’s CAC 40 surged 1.2%.
Asia Pacific Markets
Asian markets closed mixed on Thursday, with Japan’s Nikkei 225 surging 1.10%, Hong Kong’s Hang Seng index falling 0.59%, China’s SSE Composite Index declining 0.82% and India’s BSE Sensex gaining 1.24%.
Economics
U.S. initial jobless claims declined by 1,000 to 194,000 in the week ending Oct. 24, compared to market expectations of 199,000. The U.S. core Personal Consumption Expenditures price index, the Fed’s preferred gauge of underlying inflation, increased 0.3% month-over-month in September, in-line with August’s increase. The U.S. economy grew at an annualized rate of 3.4% in the third quarter, following a 2.2% gain in the second quarter and above market estimates of 3.2%. Photo via Shutterstock
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Kate Moore, Citi Wealth chief investment officer, says she's still bullish on tech and the US economy despite Alphabet reporting disappointing results for search and advertising sales. Moore also reacts to the Fed leaving rates unchanged and the importance of spending on cyber security.
Notice to Pension Funds, Asset Managers, and Fiduciaries: the securities action alleges Alphabet committed to a June 2026 launch of its flagship Gemini 3.5 Pro AI model while undisclosed training setbacks allegedly left the model months behind schedule.
, /PRNewswire/ -- SueWallSt notifies pension funds, ERISA plan fiduciaries, and asset managers that a securities class action has been filed against Alphabet Inc. (NASDAQ: GOOGL, GOOG). The action was filed on behalf of investors who purchased or acquired Alphabet securities between May 19, 2026 and July 16, 2026. Find out if you qualify to recover losses, or contact Joseph E. Levi, Esq. at [email protected] or (888) SueWallSt.
On July 16, 2026, Alphabet Class A shares fell $16.46, or 4.4%, on unusually heavy trading volume, and Class C shares fell $16.39, or a similar 4.4%. Funds holding both GOOGL and GOOG took that single-session decline in two positions at once. The window to apply for lead plaintiff closes on December 1, 2026.
Notice to Institutional Holders: What the Complaint Charges
The complaint charges that management publicly committed to a June 2026 release of Gemini 3.5 Pro, Alphabet's flagship artificial intelligence model. According to the complaint, management did not disclose that the model was delivering disappointing training results, and as averred, those undisclosed setbacks meant the launch would be significantly delayed. Bloomberg reported on July 16, 2026 that the model was months behind schedule, and Reuters reported on September 30, 2026 that Google no longer plans to release Gemini 3.5 Pro.
ERISA and Fiduciary Considerations in Institutional Investor Securities Recovery
Plan trustees and investment committees with monitoring duties often review whether portfolio losses tied to alleged securities violations call for a formal claims evaluation. Alphabet's two share classes are held across many pension, endowment, and index portfolios. As a result, the proposed class may include a substantial number of institutional purchasers.
Fiduciary Obligations and Recovery Options
Class scope: The proposed class covers purchasers of Alphabet securities, including Class A (GOOGL) and Class C (GOOG) shares, from May 19, 2026 through July 16, 2026.Lead plaintiff selection: Courts generally weigh the size of each applicant's financial interest, which often favors institutions with significant positions.Oversight role: A lead plaintiff selects class counsel, subject to court approval, and monitors the litigation on behalf of all class members.Absent class members: Institutions that do not seek appointment generally remain eligible to share in any recovery.Records to assemble: Trade-level data for both share classes, including purchase dates, quantities, prices, and any later sales."Institutional investors play a critical role in securities class actions, particularly when the issuer is as widely held as Alphabet. The complaint alleges that public commitments to a June 2026 launch were made while training setbacks went undisclosed, and fiduciaries holding either share class may wish to assess what that means for their portfolios." -- Joseph E. Levi, Esq.
Learn more about the case and your options or call (888) SueWallSt.
WHY SUEWALLST: SueWallSt is powered by Levi & Korsinsky LLP. Levi & Korsinsky LLP has established itself as a nationally-recognized securities litigation firm that has secured hundreds of millions of dollars for aggrieved shareholders and built a track record of winning high-stakes cases. The firm has extensive expertise representing investors in complex securities litigation and a team of over 70 employees to serve our clients. For seven years in a row, Levi & Korsinsky has ranked in ISS Securities Class Action Services' Top 50 Report as one of the top securities litigation firms in the United States.
Frequently Asked Questions About the Alphabet Lawsuit
Q: When did Alphabet Inc. allegedly mislead investors? A: The Class Period runs from May 19, 2026 to July 16, 2026. The complaint alleges that corrective disclosures revealed information that caused a significant stock decline.
Q: What court was the Alphabet class action filed in? A: The case was filed in the United States District Court for the Northern District of California, governed by the Private Securities Litigation Reform Act of 1995.
Q: Who are the defendants named in the Alphabet lawsuit? A: The complaint names Alphabet Inc. and individual defendants including senior executives Sundar Pichai and Anat Ashkenazi.
Q: What is a lead plaintiff and why does it matter? A: A lead plaintiff is the investor appointed by the court to represent the entire class. Lead plaintiffs are typically investors with the largest documented losses. Being appointed does not increase individual recovery but gives direct oversight of how the case is run.
Q: What do Alphabet investors need to do right now? A: Investors may gather brokerage records showing purchase dates, share quantities, and prices paid. Submit your information for a no-cost, no-obligation evaluation of your potential recovery. No immediate action is required to remain eligible as an absent class member.
Q: What if I already sold my Alphabet shares -- can I still recover losses? A: Yes. Eligibility is based on when you purchased, not whether you still hold the shares. Investors who bought during the Class Period and sold at a loss may still be eligible to participate.
Q: What if I live outside the United States? A: U.S. securities class actions generally cover purchases on U.S. exchanges regardless of the investor's country of residence.
Q: What does it cost me to participate? A: There is no upfront cost to submit your information and review whether you may be eligible to recover. Should you choose to participate in the securities class action, they are generally handled on a contingency basis, with any attorneys' fees and expenses subject to court approval.
CONTACT:\
Levi & Korsinsky, LLP\
Joseph E. Levi, Esq.\
33 Whitehall Street, 27th Floor\
New York, NY 10004\
[email protected]\
Tel: (888) SueWallSt\
Fax: (212) 363-7171
Attorney Advertising. Prior results do not guarantee similar outcomes.
Alphabet shares GOOGL plunged 13% on Thursday's open after the Google parent reported weaker-than-expected third-quarter revenue and earnings, intensifying investor concerns that artificial intelligence could undermine its core search advertising business.
If the losses hold through the regular session, the decline would mark Alphabet’s steepest one-day drop since March 2020, when the stock fell 11.6%.
It would also represent the company’s worst post-earnings reaction since going public in 2004.
Alphabet reported total third-quarter revenue of $127.6 billion, below analysts’ estimates of $128.2 billion, according to LSEG data.
Earnings per share came in at $2.12, compared with analysts' forecast of $3.02.
Search advertising, Alphabet’s largest revenue source, grew 12% to $63.35 billion in the September quarter, but fell short of analyst expectations.
The company also reported negative free cash flow of $9.07 billion, substantially worse than the $2.70 billion analysts had expected.
Although Google Cloud revenue more than doubled at $30.71 billion, the strong performance failed to reassure investors amid concerns over the cost of Alphabet’s artificial intelligence infrastructure expansion and slowing growth in its dominant search business.
The results have renewed questions about whether AI-powered services from competitors such as OpenAI’s ChatGPT and Meta’s Muse agent could disrupt the traditional search model.
BNP Paribas analyst Nick Jones wrote in a Wednesday note that the results likely revived fears that AI competitors were chipping away at Google’s search business.
Investors are also concerned that agentic shopping experiences could threaten advertising revenue if AI agents increasingly handle web browsing and purchasing decisions.
Alphabet’s search business remains central to investor concerns.
Search growth slowed to 12% year-on-year in the third quarter, down from 17% in the second quarter.
Bernstein analyst Mark Shmulik described the initial read on Alphabet’s results as offering far more negatives than positives.
He called the deceleration in search growth “material” and questioned why an increase in search queries was not translating into revenue growth to the same extent as in previous quarters.
Alphabet said currency fluctuations affected search revenue during the quarter.
The company also acknowledged that queries conducted through AI Mode were, on average, three times longer than traditional searches, but generated lower monetisation for the time being.
The challenge for Alphabet is to demonstrate that AI-powered search can generate sufficient advertising revenue to offset potential changes in how users discover information and shop online.
Raymond James lowered its price target on Alphabet to $350 from $400 while maintaining a Strong Buy rating.
The firm said the company delivered mixed results and failed to address concerns surrounding search.
It noted that AI Mode’s lower monetisation rate puts pressure on Alphabet to show that potential structural gaps in advertising load compared with traditional “10 blue links” can be offset by improved conversion rates resulting from richer context and a broader query universe.
Raymond James also highlighted the company’s spending plans, maintaining its capital expenditure outlook, including significant growth in 2027.
The firm estimates capital expenditure of $350 billion, compared with the broader market’s estimate of $320 billion.
It lowered its price target while seeking greater visibility into whether AI Mode and Gemini can become incremental growth drivers.
The firm also flagged risks from agentic workflows that could significantly change shopping and browsing behaviour.
Several other analysts lowered their price targets following the results, although they maintained positive views on Alphabet’s longer-term prospects.
Susquehanna cut its price target on Alphabet to $400 from $460 while maintaining a Positive rating.
The firm raised its 2026 net revenue estimate by 2%, left GAAP operating income broadly unchanged and reduced its GAAP earnings-per-share estimate by 4%.
For 2027, Susquehanna increased its revenue estimate by 7%, its GAAP operating income estimate by 3% and its GAAP earnings-per-share forecast by 2%.
Cantor Fitzgerald analyst Deepak Mathivanan lowered his price target to $350 from $420 while retaining an Overweight rating.
He pointed to the earnings miss, operating income that came in 7% below estimates, and slowing search growth, which had driven a 10% decline in after-hours trading.
However, the analyst cited cloud growth above 100%, record search queries, strong demand for tensor processing units and continued Gemini innovation as supporting Alphabet’s AI positioning and long-term upside.
The firm recommended buying shares on weakness.
Rosenblatt analyst Barton Crockett reduced his price target to $380 from $410 but maintained a Buy rating.
The firm said strong cloud performance was overshadowed by disappointing search results.
Rosenblatt expects Google Cloud revenue to surpass the combined revenue of Search and YouTube by 2028.
It believes Alphabet’s value is gradually shifting from advertising towards cloud computing, although investors will need time to assess near-term trends and the durability of its search business.
Cloud growth remains a long-term opportunityJPMorgan analyst Doug Anmuth retained an Overweight rating and a $375 price target, arguing that the sharp share-price reaction highlighted the limited tolerance investors have for disappointing results from companies spending heavily on AI infrastructure.
"Alphabet’s 3Q results & the stock’s sharp move lower show us the margin for error when a hyperscaler spending hundreds of billions on the AI infrastructure buildout and flipping to negative FCF posts disappointing results in the core… We’re sticking with Overweight, as we believe Google’s Search headwinds are more navigable than permanently structural, and Google Cloud becomes an even more critical part of the business, driving overall Alphabet revenue growth of ~30% in both 2027 & 2028."
The outlook highlights the central tension facing Alphabet.
Its AI investments and rapidly expanding cloud business could support substantial future growth, but investors want evidence that these investments will generate adequate returns without undermining the advertising business that has historically financed the company’s expansion.
Alphabet NASDAQ: GOOGL reported third-quarter results after the close on Wednesday, Oct. 28, just a couple of hours after the Federal Reserve’s latest rate decision. The Fed raised rates in September to 3.75% to 4%, its first hike since 2023, and most policymakers have signaled another increase is likely before year-end. So the Fed holding steady on Wednesday, as markets widely expected, wasn’t the real news.
Alphabet Today
$286.92 -37.97 (-11.69%)
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$270.70▼
$408.610.31%
14.40
$416.12
What stood out was the 10–2 vote, with Governor Lisa Cook and Cleveland Fed President Beth Hammack both pushing for another hike, along with a statement noting that inflation “remains elevated.” That keeps a December hike very much in play.
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That backdrop arguably matters more for Alphabet than it might seem. The company has increasingly turned to debt to fund its AI buildout, issuing about $52 billion in senior notes in the first half of 2026 and returning to the bond market in August. Its long-term debt stood at roughly $98 billion as of June 30. Higher rates make borrowing more expensive and raise the return Alphabet’s AI spending ultimately needs to deliver.
Cloud Delivered, Earnings Didn’tRevenue climbed 25% to $127.6 billion, just shy of the roughly $128 billion analysts expected. Earnings of $2.12 per share fell well short of the $3.01 consensus. An $8.7 billion loss on equity investments cut earnings per share (EPS) by about 55 cents, though results would still have missed expectations without it.
Google Cloud told a very different story. Cloud revenue surged 103% to $30.7 billion, ahead of the $28.7 billion analysts expected, while Cloud operating income more than tripled to $11.1 billion. Backlog rose to $561 billion from $514 billion last quarter, and management now expects to recognize just over 55% of it as revenue over the next 24 months, up from just over 50%.
The spending side was just as striking. Capital expenditure (CapEx) reached $51.4 billion, more than double the year-ago level, while free cash flow was negative $9.1 billion. Beyond CapEx, TPU inventory builds, and a $5.2 billion European Commission fine payment also weighed on that figure.
In Wednesday’s regular session, which also absorbed the Fed decision, GOOGL shares closed up 1.3% at $324.89. Following the report, though, the stock was down about 10% in premarket trading.
Alphabet Sits on Both Sides of the AI TradeWhat sets Alphabet apart from most AI spenders is that it both buys and sells AI capacity. On the buying side, the company held its 2026 CapEx guidance at $195 billion to $205 billion. With roughly $132 billion already spent through the third quarter, that implies fourth-quarter CapEx of about $63 billion to $73 billion. Management also said spending will “increase significantly” in 2027, with more details coming on its fourth-quarter call.
On the selling side, TPU system sales contributed meaningfully to Cloud growth. Management said it now has more than 100 significant TPU customers and recently announced a partnership with Oracle NYSE: ORCL to deliver TPU systems. It expects TPU system sales to scale further in the fourth quarter, followed by a meaningful revenue ramp in 2027. For more on the chip suppliers behind those systems, see MarketBeat’s recent coverage of Broadcom NASDAQ: AVGO.
What Supports the Spending, and What Challenges ItThe supportive case is that returns are clearly starting to show. Cloud revenue more than doubled, its profit more than tripled, and backlog is not only growing but converting faster. Analysts have been bullish too, with a Buy consensus across 56 analysts and an average price target of $425.04, though that price target has dropped since the earnings report.
That said, costs are climbing fast. CapEx grew even more quickly than Cloud revenue, depreciation is rising as new infrastructure comes online, and management warned that third-party computing capacity coming online in the fourth quarter will pressure Cloud margins in the near term. With free cash flow negative for a second straight quarter and the Fed still leaning toward higher rates, each borrowed dollar arguably has a higher bar to clear.
The Return Is There, But So Is the CostAlphabet’s third quarter showed its AI investment is translating into real revenue and profit. The market’s reaction, though, suggests investors are now as focused on what that growth costs to achieve as on how much higher spending could climb in 2027.
Alphabet Inc. (GOOGL) Price Chart for Thursday, October, 29, 2026
Several upcoming markers should help answer that question. The Fed’s Dec. 8–9 meeting will show whether borrowing costs are heading higher still. Alphabet’s fourth-quarter call should bring the first real detail on 2027 spending plans. And the TPU ramp management expects next year will test whether selling AI capacity can help offset the cost of building it. Until then, the debate will likely center less on whether the AI investment is working and more on whether returns can keep pace with the bill.
Should You Invest $1,000 in Alphabet Right Now?Before you consider Alphabet, you'll want to hear this.
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Alphabet just posted its worst post-earnings drop on record, and if you own XLC or QQQ, you absorbed the hit without buying a single Google share. The reason comes down to a concentration risk buried in your fund that most…
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Alphabet (NASDAQ:GOOGL | GOOGL Price Prediction) shares are down about 13% this morning, trading near $283, after third-quarter results disappointed. CNBC reported the stock was on course for its biggest post-earnings drop on record. If you own the Communication Services Select Sector SPDR Fund (NYSEARCA:XLC) or Invesco QQQ (NASDAQ:QQQ), you took part of that hit even if you never bought a Google share. XLC gets hit hardest, and the reason is a concentration risk most fund holders never check.
What Spooked Wall Street About Alphabet’s Quarter
Alphabet earned $2.12 per share, missing the $2.97 consensus and ending a 12-quarter streak of beats. Revenue of $127.58 billion came in just under the $127.83 billion estimate. Coverage from Reuters, the WSJ, the Financial Times and Fortune focused on slowing search growth, the revenue miss and heavy AI spending deepening cash burn.
Capital spending jumped 114% to $51.36 billion, and free cash flow turned negative at $9.07 billion. To pay for it, Alphabet issued $28.7 billion in notes and sold new shares into the market, which reduces every existing holder’s piece of the company.
Investors looked past Google Cloud, where revenue grew 103%. Part of the miss also came from an $8.70 billion loss on equity investments, which cut EPS by $0.55. Operating income still rose 30%.
How Much Alphabet Sits Inside Your Fund
Alphabet has two share classes: voting Class A (GOOGL) and nonvoting Class C. Most index funds hold both, which means the single line on your statement understates your real exposure.
In XLC’s June 30 filing, Class A was 10% of net assets and Class C was 13%. Each position on its own outweighs every XLC holding except Meta Platforms at 20%. The next largest, Take-Two, accounts for just 5%.
QQQ held about 3% in each class. The Vanguard Growth ETF (NYSEARCA:VUG) listed Alphabet at 10%, its third-largest holding behind NVIDIA and Apple. These are midyear snapshots. Alphabet has fallen 17% over the past month, so its current weights are lower.
Why XLC Holders Feel This Most
These funds weight by market cap: the bigger a company’s market value, the more of your dollar it gets. A sharp Alphabet drop flows straight into the fund’s net asset value in the same session, scaled by its weight. With your money spread across two large Alphabet positions, XLC takes a bigger hit than any diversified fund would.
Meta makes it worse. XLC’s three largest positions belong to two companies that both sell digital ads. A scare about AI spending or ad growth hits both at once. The fund looks like it holds a broad set of media and telecom names, but trades mostly on two stocks.
Index caps have limits. QQQ’s index limits any single issuer to 24% at its quarterly rebalancing in March, June, September and December. Caps only reduce a position after it grows too big. They can’t protect you from a one-day drop between rebalances.
Signals Worth Checking Before Next Quarter
Top-three weight. State Street posts XLC’s full holdings daily on its website. If the three largest positions together near half the fund, you effectively own a two-stock portfolio. Check it every quarter.
Overlap. Owning XLC, QQQ and VUG together means you hold Alphabet three times over. A free fund-overlap tool will show how much of your money lands on the same few megacaps. Run one each year.
Alphabet’s fourth-quarter free cash flow. Another negative quarter while capital spending keeps rising would back up the cash-burn worry. A swing back to positive would ease it.
Share sales. Alphabet still has $27.6 billion left in its share-sale program. Its quarterly filings show how much has been sold, and regular selling means more dilution for fund holders.
A Lower-Concentration Option
The Invesco S&P 500 Equal Weight ETF (NYSEARCA:RSP) resets every company to the same weight each quarter, so a single megacap miss just registers. The tradeoff: it charges a higher fee and trails when a few giants lead the market.
What This Means If You’re Near Retirement
If your core holding is a broad S&P 500 fund, the effect is more subtle. Alphabet is one large position among about 500. If a sector fund like XLC makes up a big share of your retirement money, concentration is the risk to deal with now. Two advertising companies drive most of its returns. Alphabet’s next cash-flow report will show whether today’s drop was a one-quarter shock or the start of a longer pressure.
Contact [email protected] for any questions or corrections.
Alphabet generated significant growth in the quarter, but earnings fell short of analysts' estimates. The company's free cash flow is under pressure as it spends on the AI build-out.
Alphabet Inc. (NASDAQ:GOOGL) (NASDAQ:GOOG) has agreed to spend up to $1.08 trillion in the years ahead. Meanwhile, Google Cloud has $561 billion in signed contracts not yet counted as revenue.
CFO Anat Ashkenazi gave both figures on the company’s third-quarter earnings call Wednesday evening, and Alphabet has not yet filed its quarterly report.
GOOGL stock is plunging after earnings. Get all the details here. Breaking Down the CommitmentsThe $1.08 trillion includes $924 billion in future purchase commitments, plus $152 billion in pre-commencement leases and other obligations. The agreements run for multiple years and cover technical infrastructure, inventory, leases and energy.
Actual spending could come in lower as Ashkenazi said the amounts reflect maximum contractual obligations, and many of the deals allow pricing and volumes to shift. The commitments also support all of Google, including Search, YouTube, Gemini and Cloud, and measuring them against the Cloud backlog alone makes the gap look wider.
The Cloud BacklogThe $561 billion counts signed Cloud customer contracts not yet booked as revenue and excludes cancellable deals. The backlog rose from $514 billion at the end of the second quarter. Alphabet expects to recognize more than 55% of it over the next 24 months, or about $310 billion.
Cloud had a blockbuster quarter. Revenue doubled from a year earlier to $30.71 billion, and segment operating income more than tripled to $11.12 billion.
Cloud CEO Thomas Kurian said 18 of the unit’s product lines now generate more than $1 billion each in revenue and the segment’s profit margin widened to 36.2%.
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Spending Weighs on the StockThe rest of the report drew a harsher reaction. Alphabet missed Wall Street’s profit and revenue estimates, and its shares fell more than 10% in extended trading. The company had not missed on both lines in nearly four years.
Capital expenditures hit $51.4 billion in the quarter, more than doubling $24 billion from a year earlier. Free cash flow was negative $9.07 billion, and next year will cost even more.
Ashkenazi kept the 2026 capex forecast at $195 billion to $205 billion and said spending would rise significantly in 2027, though executives gave no number. Ashkenazi also said building up inventory of Google’s TPU chips would put more strain on free cash flow.
Cash on HandAlphabet ended the quarter with $265.1 billion in cash and marketable securities and $125.1 billion in debt. The company raised $84.8 billion in equity in June to fund its AI buildout, with $10 billion from Berkshire Hathaway Inc. (NYSE:BRK) (NYSE:BRK).
The quarterly filing should add detail on the commitments once it is published. Ashkenazi said Alphabet will share more about 2027 capital spending on its fourth-quarter call.
GOOGL Stock Price Activity: Alphabet stock was down 12.67% at $283.74 at the time of publication Thursday, according to Benzinga Pro market data.
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Photo: Shutterstock
This content was partially produced with the help of AI tools and was reviewed and published by Benzinga editors.
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Google (NASDAQ: GOOGL) stock is on track for its worst single-day decline in history, with shares plunging roughly 12% following its third-quarter earnings report.
Not only that, but the sell-off is threatening to erase nearly $500 billion from the company’s market capitalization – potentially one of the largest losses ever recorded by a U.S. company.
As the price has dropped from $321 to $285, GOOGL shares are now trading at the lowest price-to-earnings (P/E) multiple in history, at 14.273.
Google stock price one-day chart. Source: Finbold Why is Google stock slipping? The market’s concerns about the results are understandable. Namely, search revenue grew 12% to approximately $63 billion, missing Wall Street’s $65 billion estimate, while rising artificial intelligence (AI) infrastructure spending pushed free cash flow to a deficit of roughly $9 billion.
However, the underlying growth story remains substantial in other respects. For instance, Google Cloud revenue more than doubled to approximately $31 billion, and the Gemini app surpassed 1 billion users.
Of course, investors are increasingly questioning when those investments will translate into sustainable cash flow and whether AI will ultimately strengthen or disrupt its core search business. As a result, 18 Wall Street analysts have slashed their Google stock price forecasts.
Google shares post record losses Overall, the scale of the sell-off is extraordinary. Alphabet’s estimated $496 billion loss would dwarf its previous worst single-day decline of approximately $275 billion. As such, it would be comparable to Nvidia’s (NASDAQ: NVDA) roughly $593 billion loss in January 2025.
As analysts note, the investment narrative now comes down to valuation versus execution risk. If AI sinks Google’s search dominance and expenses continue to put pressure on cash flow, things could indeed go south.
Conversely, though, if Alphabet maintains its search leadership, scales its cloud business, and eventually does monetize its AI efforts, the current valuation could offer substantial upside.
Therefore, several major firms, including Bank of America (BofA) and Morgan Stanley, still maintain bullish ratings despite lowering their targets.
Featured image via Shutterstock
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Amazon's third-quarter earnings report, due after market close today, is expected to draw attention to Amazon Web Services (AWS). Investors will assess whether accelerating cloud growth can justify the company's rising investment in artificial intelligence infrastructure.
COLUMBUS, Ohio--(BUSINESS WIRE)--McGraw Hill, Inc. (NYSE: MH), a leading global provider of education solutions for preK-12, higher education and professional learning, today announced that it will enable McGraw Hill's higher education and school district customers who have a Microsoft 365 Copilot license to access McGraw Hill's trusted content through Copilot to support teaching and learning in new and innovative ways. McGraw Hill is among the first major education companies to make its propri.
The Fed's interest rate meeting didn't offer the fireworks Kevin Green was expecting to see, and a mixed picture in the latest Mag 7 earnings continues to pressure the AI trade. He turns to Alphabet (GOOGL) as the leading example, where shares plunged 11% in the premarket as ad and search revenue see weakness despite cloud's strength.
Alphabet just posted its second straight quarter of negative free cash flow while Microsoft covered its AI expansion and had billions left over. The gap between how these two hyperscalers are funding the same buildout tells investors everything about who…
The AI buildout is now costing Alphabet (NASDAQ:GOOGL | GOOGL Price Prediction) real cash, and a rival’s quarter just showed it doesn’t have to. Alphabet stock is at $288 in morning trading, down 11%.
Among Alphabet’s peers, Microsoft (NASDAQ:MSFT) stock is at $540, up 2%. Meanwhile, Meta Platforms (NASDAQ:META) stock is at $618, up 1%.
Alphabet’s Cloud Boom Comes With a Cash Bill
Alphabet reported its Q3 2026 results after the close on October 28, with revenue of $127.58 billion, up 25% year over year.
The company’s earnings per share (EPS) of $2.12 fell well short of Wall Street analysts’ consensus estimate, ending Alphabet’s long streak of beats. Most of that miss traces to an $8.7 billion loss on Alphabet’s equity investment portfolio, which includes a large stake in SpaceX (NASDAQ:SPCX), along with heavier AI spending.
Capital spending at Alphabet reached $51.3 billion, up from $44.9 billion the prior quarter, and that pushed free cash flow to negative $9.1 billion. This marked Alphabet’s second straight quarter of negative free cash flow, a sharp reversal from the positive free cash flow it posted in Q1 2026.
To help fund the expansion, Alphabet disclosed that it issued $28.7 billion in senior unsecured debt and raised $12.4 billion through at-the-market stock sales during the quarter. Back in July, Alphabet indicated that full-year capital spending could reach up to $205 billion, and the company held its 2026 outlook unchanged while signaling a significant increase in 2027.
On the bright side, Alphabet’s Google Cloud revenue grew 103% to $30.71 billion. CEO Sundar Pichai said, “We had a strong quarter and are now on a half-trillion dollar revenue run rate.” Even so, Alphabet stock is now down 8% year to date.
Microsoft Proves AI Spending Can Still Throw Off Cash
Microsoft delivered the contrast in its Q1 FY2027 report, released the same evening. Revenue at Microsoft reached $92.3 billion, up 19%, while its adjusted EPS of $4.89 exceeded the $4.72 consensus estimate from Wall Street analysts.
Azure, Microsoft’s cloud platform, grew 48%, against the 44% consensus forecast from Wall Street analysts. Capital spending at Microsoft reached $45.2 billion, and the company expects more than $50 billion next quarter.
Free cash flow at Microsoft still came in at a positive $18.6 billion, and the company expects it to stay positive for the full fiscal year. Chief Financial Officer Amy Hood stated, “As we continue to improve the efficiencies of our infrastructure, each dollar of CapEx has the potential to support more revenue and higher returns over time.” Contracted demand backs that confidence, with Microsoft’s commercial remaining performance obligation, a backlog of signed future revenue, up 73% to $677 billion. That contrast matters to investors weighing AI payback, since Microsoft is covering its expansion with operating cash while Alphabet leans on debt and stock sales.
Unlike Meta, which funds its AI push mostly from advertising, Microsoft sells much of its new capacity to enterprise customers under contract. Meta, sharing Alphabet’s cash squeeze, edges higher after an October 21 report showing negative free cash flow of $2.12 billion. Amazon (NASDAQ:AMZN) stock is at $250, down 2%, with its own quarterly report shaping up as the next test of AI spending.
Hyperscaler AI Spending Faces Its Payback Test
The next test for Alphabet is whether Google Cloud growth can outrun capital spending enough to turn free cash flow positive again. For Microsoft, the open question is whether Azure keeps beating expectations as its spending rises. Meta faces a similar test after guiding 2026 capital spending to $135 billion to $145 billion. Investors will be watching Amazon’s report to see whether a third hyperscaler is generating cash from its AI expansion or burning through it. That capex has to be powered, cooled, and networked by somebody, and we covered seven of those AI infrastructure suppliers in a free report you can grab here.
Bulls can point to triple-digit cloud growth, a Gemini app with one billion users and Search query growth at a five-year high as evidence Alphabet’s spending is landing with customers. Rising interest costs, share dilution and swings in the equity portfolio form the bear case, since each could keep Alphabet’s reported earnings under pressure. A conservative approach could make sense while the debate over Alphabet’s AI payback plays out.
Contact [email protected] for any questions or corrections.
CoreWeave offers higher potential upside from AI infrastructure growth, while Microsoft's Azure momentum, diversified business and cash generation provide a lower-risk path to AI gains.
Azure just crossed $100 billion in annual revenue and Microsoft's AI seats are multiplying fast, but the stock has gained barely 2% over the past year. A projection model now puts five-year returns anywhere from modest to life-changing, and the…
A $1,000 stake in Microsoft (NASDAQ:MSFT | MSFT Price Prediction) buys a piece of the company running Azure, the cloud platform that passed $100 billion in annual revenue for the first time. Our forecast model priced the stock at $532.95 in its latest run, and the most recent delayed quote was $525.76.
Microsoft’s AI business is now growing quickly while the company spends record sums on infrastructure, so it is a good time to ask what $1,000 could turn into by 2030.
What $1,000 Could Become: Your Base-Case Answer
If Microsoft compounds at 10% a year for four years, $1,000 grows to $1,464.10 by 2030. That figure is illustrative only. It shows what steady 10% growth would do and is separate from the model’s output.
The model creates 1-year and 5-year targets. The closest one to 2030 is the 5-year horizon, which ends October 22, 2031. Under the central scenario, a $1,000 investment could be worth about $1,813.30 by that date, a total return of 81.33%.
It assumes a projected share price of $966.38 and an annualized return of 12.64%, above the 10% in the headline. Along the way, the central projection reaches $889.99 per share in October 2030. Treat that as an illustrative example, since it is not a projected target.
Bull, Base and Bear: The Full Range for Your Stake
Scenario (5-Year)
Target Price
Total Return
Annualized Return
Value of $1,000
Bull
$1,202.38
125.61%
17.67%
$2,256.10
Base
$966.38
81.33%
12.64%
$1,813.30
Bear
$641.43
20.35%
3.77%
$1,203.50
Over the next year, the central projection targets $649.29, a 21.83% return that would turn $1,000 into $1,218.30. Analysts are more conservative, with a consensus target of $600.88.
Even so, 14 rate the stock a strong buy, 39 a buy and 2 a hold, with no sells. Confidence in the model is graded at 0.9 on a scale of 0 to 1.
Three Growth Engines Behind the Target
Azure Demand Is Outrunning Supply
Azure revenue grew 43% in fiscal Q4 2026. Commercial remaining performance obligations, which measure signed future revenue, rose 84% to $678B. Excluding OpenAI, that backlog grew 25%. CFO Amy Hood said on the call, “Demand continues to exceed available supply.”
AI Is Turning Into Revenue
Microsoft 365 Copilot has passed 30 million paid seats, and net paid seat additions more than doubled sequentially. One quarter earlier, the AI business had reached a $37B annualized revenue run rate, up 123% YoY. CEO Satya Nadella said, “I’ve never been more confident in Microsoft’s opportunity to drive durable long-term growth.”
Steady Earnings Beats
Microsoft has beaten EPS estimates for 6 straight quarters. Its most recent result was $4.74, against a $4.24 estimate. Fiscal 2026 revenue reached $331.84B, and management expects “another fiscal year of double-digit revenue and operating income growth.”
The stock trades at about 27x forward earnings, so the projection depends on earnings growth more than on investors paying a higher multiple.
Risks That Could Shrink Your Stake
The biggest swing factor is spending. Capex for the full year reached $115.95B, up 79.62%, and management guided to more than $50 billion next quarter. If enterprise AI demand slows, those data centers could weigh on margins and free cash flow for years.
All of that expansion still has to be powered, cooled, and connected by someone, and we pulled together seven suppliers riding that same wave in a free AI infrastructure report. Microsoft’s gross margin has already slid as the business shifts toward Azure and AI infrastructure.
The consumer side is weaker. More Personal Computing revenue fell 4%, Xbox dropped 10%, and Windows OEM and Devices revenue is expected to fall in the high teens this fiscal year. The company’s filings also list intense competition, cyberattacks, capacity limits and changing regulation as risks.
The stock has been volatile, too. Over the past 52 weeks it has traded as low as $348.54, and its one-year gain is only 2.41%. Microsoft also has an earnings report coming up, which investors are watching closely, so it is worth keeping an eye on the stock as Azure growth guidance comes out.
Your $1,000 Range by the Five-Year Mark
Over the model’s 5-year horizon, a $1,000 stake in Microsoft runs from $1,203.50 in the bear case to $2,256.10 in the bull case, while the base case is $1,813.30.
The headline’s 10%-a-year path to $1,464.10 by 2030 falls between the bear and base outcomes. Every figure here is a scenario. None of them is guaranteed.
This article is a projection for research purposes only.
Contact [email protected] for any questions or corrections.
Analyst’s Disclosure: I/we have a beneficial long position in the shares of MSFT, AMZN, META either through stock ownership, options, or other derivatives. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.
Seeking Alpha's Disclosure: Past performance is no guarantee of future results. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. Any views or opinions expressed above may not reflect those of Seeking Alpha as a whole. Seeking Alpha is not a licensed securities dealer, broker or US investment adviser or investment bank. Our analysts are third party authors that include both professional investors and individual investors who may not be licensed or certified by any institute or regulatory body.
DUBLIN & FRAMINGHAM, Mass.--(BUSINESS WIRE)--Workhuman®, the world's leading employee recognition provider, today announced that its Microsoft Teams and Outlook applications have achieved Microsoft 365 Certification, Microsoft's highest level of app compliance assurance. The certification confirms that Workhuman's applications have successfully completed Microsoft's rigorous certification process. Certified applications are vetted against controls derived from leading industry frameworks and de.
Analyst’s Disclosure: I/we have a beneficial long position in the shares of MSFT, GOOG, AMZN either through stock ownership, options, or other derivatives. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.
Seeking Alpha's Disclosure: Past performance is no guarantee of future results. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. Any views or opinions expressed above may not reflect those of Seeking Alpha as a whole. Seeking Alpha is not a licensed securities dealer, broker or US investment adviser or investment bank. Our analysts are third party authors that include both professional investors and individual investors who may not be licensed or certified by any institute or regulatory body.
AMD has surged over 150% this year and landed massive GPU deals with OpenAI and Anthropic, yet one metric keeps our rating stuck at hold. Here is the number that could finally change that.
The 24/7 Wall St. price target for AMD (NASDAQ:AMD | AMD Price Prediction) is $542.87 over the next 12 months. Shares trade at $549.58 this morning, so the target implies -1.2% downside. We rate AMD a hold with high confidence.
Metric
Value
Current Price
$549.58
Price Target from 24/7 Wall St.
$542.87
Upside/Downside
-1.2%
Recommendation
HOLD
Confidence Level
90%
The model ran against the close of $531.29, where it showed 2.18% upside. This morning’s 3.44% gain raised shares just past fair value.
Data Center revenue, the key driver, reached $6.72B last quarter, 58% of sales, with the division expected to “more than double year-over-year in 2027.”
Why We Could Be Wrong
AMD trades slightly above our target, and the upside drivers are real. Anthropic plans to deploy up to 2 gigawatts of MI450 GPUs in Helios racks, and Lisa Su said Helios demand is “tracking ahead of our initial forecast.” Our target is one point among many, and the bull case below shows how AMD could beat it.
A 156% Rally Meets an October Pullback
AMD is up 156.62% year to date, but shares fell 12.85% over the past month before rising 2.14% this week. The stock trades 16.5% below its 52-week high of $658.52 and well above its low of $188.22.
In Q2, revenue grew 50.1% to $11.54B, beating the $11.31B estimate. EPS came in at $1.66, ahead of the $1.61 consensus. Q3 guidance calls for roughly $13B.
The latest news is a large stock offering from Meta Platforms (NASDAQ:META) to fund AI expansion. MarketWatch reports that AMD, NVIDIA (NASDAQ:NVDA) and Broadcom (NASDAQ:AVGO) could buy shares in it (MarketWatch).
Why Bulls See $688 Ahead
The bull case reaches $688.72. Management expects server revenue to grow more than 80% in the second half of 2026 and more than 70% in 2027. AMD also expects EPS to beat its $20 long-term target by a wide margin.
The OpenAI (6 GW) and Meta (up to 6 GW) deals give that plan real backing. Wall Street agrees: 5 Strong Buy ratings, 40 Buys, 11 Holds and no Sells, with a consensus target of $637.61.
What Could Pull AMD Toward $430
The bear case is $430.83. AMD trades at 200 times trailing earnings, and Gaming revenue fell 31%. Export controls previously forced an $800M MI308 inventory charge, and server CPU supply remains tight. Free cash flow dropped 9.89% to $1.56B.
Bulls would answer that inventory of about $8.5 billion is being built ahead of the Helios ramp. They would also point to the non-GAAP operating margin, which expanded to 27% from 12%.
AMD Trades at NVIDIA’s Multiple With Room to Catch Up
NVIDIA is AMD’s direct competition in AI GPUs. It trades at 43 times trailing earnings, roughly AMD’s 43 forward multiple, while earning a 60% operating margin against AMD’s 10.66%.
Broadcom competes for the same hyperscaler AI budgets with custom accelerators. Its AI semiconductor revenue rose 221% to $16.70 billion. Both peers are growing AI revenue faster on higher margins, which makes our target look reasonable.
Company
Trailing P/E
AI/Data Center Growth (Latest Quarter)
AMD
200
107%
NVIDIA
43
117%
Broadcom
N/A
221%
Data Center Proof Could Shift Our HOLD Rating
The 24/7 Wall St. price target of $542.87 supports a hold at 90% confidence. Valuation is the deciding factor: the stock already prices in much of the Helios ramp.
Our rating would turn more positive if Q3 Data Center results show Helios shipments speeding up into Q4. Our view would turn more cautious if supply limits or export rules slow that ramp. For now, AMD looks fairly valued.
Year
Price Target from 24/7 Wall St.
2026
$514.31
2027
$542.87
2028
$565.01
2029
$588.05
2030
$612.03
These projections assume AMD keeps executing on its current strategy. Hitting its $1.4 trillion AI accelerator market forecast could add significant upside, while a slowdown in hyperscaler spending could add significant downside.
Contact [email protected] for any questions or corrections.
Beyond analysts' top-and-bottom-line estimates for Advanced Micro (AMD), evaluate projections for some of its key metrics to gain a better insight into how the business might have performed for the quarter ended September 2026.
Oct 29 (Reuters) - Alphabet (GOOGL.O), opens new tab is making billions of dollars selling homegrown AI chips it once reserved for internal use, but building inventory to meet surging demand is draining cash as the tech giant spends heavily on data centres.
Unlike its traditional search and cloud businesses, selling AI chips that compete with Nvidia's requires Alphabet to spend on hardware well before customers pay, putting pressure on cash flow.
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The trade-off, outlined by finance chief Anat Ashkenazi on Alphabet's post-earnings call on Wednesday, offers an early look at the costs of a business that has emerged as one of the company's biggest growth areas as investors fret over AI's threat to its lucrative search advertising business.
"Where previously inventory balances were primarily some of our hardware products, now those TPU (custom chip) systems that are not yet sold will be showing up. So you see cash going out ... it's not the traditional kind of capex but rather a different cycle of cash flow generation," Ashkenazi said.
That shift could pressure Alphabet just as investors grow more concerned about the mounting cost of AI. Its shares fell nearly 11% on Thursday after the company reported another quarter of cash burn and reiterated that spending on AI infrastructure would rise sharply next year.
Still, the processors are helping drive growth.
The Google logo is seen during Kering Innovation Day 2026 at the company’s headquarters in Paris, France, January 22, 2026. REUTERS/Gonzalo Fuentes Purchase Licensing Rights, opens new tab
Alphabet does not break out revenue or margins from the chips, called tensor processing units, but said their sales made a "meaningful" contribution as Google Cloud revenue more than doubled in the September quarter.
Sales of TPU systems, which bundle the chips with networking, storage and software, are expected to rise further in the current quarter and ramp up significantly in 2027, Google Cloud chief Thomas Kurian said.
Alphabet last year said it would supply Anthropic with TPUs worth tens of billions of dollars. Media reports have said the company is also in talks on a similar deal with OpenAI.
"We completely think these are short-term gyrations," said Jeremy Saltzberg, senior investment officer at Check Capital.
"We don't have reason to believe that the margins would be significantly different than what an Nvidia GPU (graphic processing unit) would sell for. And of course, Nvidia GPU margin is incredible."
Reporting by Akash Sriram, Deborah Sophia in Bengaluru; Editing by Aditya Soni and Anil D'Silva
Our Standards: The Thomson Reuters Trust Principles., opens new tab
For the first time in more than four decades, the Federal Reserve is shrinking its voting calendar, and the timing could not be more fraught with a December rate hike now seen as nearly certain and long bonds already sliding.
The Federal Reserve will still hold eight scheduled meetings in 2027. Starting next fall, though, one will become a strategy session with no rate vote and no policy statement. This is the first cut in scheduled rate-setting meetings since the eight-meeting cadence began in 1981.
Chair Kevin Warsh announced the change on October 28, 2026. The same day, the Fed held its target range at 3.75% to 4% in a 10-2 vote. Governor Lisa D. Cook and Cleveland Fed President Beth M. Hammack dissented, favoring a 25-basis-point hike. A basis point is one hundredth of a percentage point.
The SPDR S&P 500 ETF Trust (NYSEARCA:SPY) closed at $772.31, then slipped to $768.87 after hours, down 0.45%. The iShares 20+ Year Treasury Bond ETF (NASDAQ:TLT) fell 0.78% to $80.99. For holders of either fund, the key question is whether fewer votes during a hiking debate change the risk you carry.
What Warsh Committed To and What He Left Open His prepared remarks were specific: “We believe eight meetings per year is the right number for the FOMC. But in 2027, one meeting will focus exclusively on broad monetary policy strategy, with neither a vote on the federal funds rate nor a policy statement anticipated.” In 2028, the Fed will hold two strategy meetings and six policy meetings. The quotes come from a preliminary transcript.
Warsh did not say which 2027 meeting loses its vote. The Fed’s posted calendar still lists eight 2027 meetings and marks none of them as a strategy session. One independent economist estimated October, but that is only a guess. The rest of 2026 stays as scheduled, and the Fed can still act between meetings, as it did in early 2020.
Why Longer Gaps Matter in a Hiking Cycle Warsh called the schedule “more than some administrative detail.” With fewer votes, more data gathers between decisions, so each remaining vote can deliver a bigger surprise. With fewer policy statements, press conferences and projections will carry more weight.
This matters more because the Fed is considering hikes. Warsh said first-half growth was revised up to 2.4% from 1.8%, and that inflation had run above target for close to 6 years. As of about 1:43 a.m. ET on October 29, prediction markets put the chance of a December hike at 79%.
Political Pressure Around the Calendar On August 25, 2026, Sen. Ruben Gallego and six other Senate Democrats pressed Warsh to keep at least eight meetings. The law requires only four.
Warsh kept eight meetings on the calendar and still reduced the number of votes. People worried about the Fed’s independence will watch how the vacant vote slot gets used.
Long bonds fell the most after the news. The gap between 10-year and 2-year Treasury yields widened to 0.38% on October 28 from 0.29% a day earlier. TLT is down 3.83% year to date.
SPY is up 13.26% year to date even with the 10-year yield at 4.99%. The fund leans heavily on growth stocks: NVIDIA (NASDAQ:NVDA | NVDA Price Prediction) alone made up 7.58% of assets at the last fact sheet.
What the Fed Shift Means for SPY and TLT Holders Strong growth supports corporate profits. Stocks also absorbed a hawkish hold calmly, with the VIX volatility index at 17.52 going into the decision.
TLT carries more rate risk than SPY. Rate hikes combined with longer gaps between votes leave long bonds most exposed to uncertainty about where rates are heading.
The test comes on December 9, when the Fed releases new projections. If they show hikes continuing into 2027, or if the Fed marks the strategy session on its calendar for an early 2027 meeting, SPY’s after-hours level of $768.87 will show whether stocks can absorb a tighter Fed.
Contact [email protected] for any questions or corrections.
Key Takeaways NVIDIA expects fiscal Q3 2027 gross margin to decline to 74% from 75% in the preceding quarter.Fiscal Q2 revenues surged 106% to $96.2B, driven by a 117% jump in Data Center sales to $89B.NVDA's supplier ties, pricing power and Vera Rubin's efficiency gains could help offset rising memory costs. NVIDIA Corporation’s (NVDA - Free Report) gross margins could face pressure as rising memory costs and supply constraints challenge its ability to maintain strong profitability. However, the company’s pricing power, growing AI demand and shift toward advanced platforms could help offset some of these headwinds.
In the second quarter of fiscal 2027, NVIDIA reported a non-GAAP gross margin of 75% compared with 72.4% a year earlier and 75% in the previous quarter. Revenues jumped 106% year over year and 18% sequentially to $96.2 billion, while Data Center revenues surged 117% to $89 billion. These figures highlight the company’s strong position in the AI infrastructure market.
Still, NVIDIA expects gross margin to decline sequentially to 74% in the third quarter of fiscal 2027, plus or minus 50 basis points. Higher memory prices are a key concern because advanced AI systems require large amounts of high-performance memory. Tight supply could increase component costs and limit production flexibility.
NVIDIA has several ways to protect profitability. Its strong relationships with major memory suppliers could help secure supplies, while its advanced graphics processing units (GPUs) and integrated computing systems give it pricing power. The company is also increasing supply and capacity commitments to support future demand.
The Vera Rubin platform offers another potential boost. Its improved computing performance and efficiency could help customers justify higher spending on AI infrastructure, supporting NVIDIA’s ability to pass on some cost increases. Overall, NVIDIA’s margins may face near-term pressure, but strong demand and pricing power provide important support.
NVIDIA Rivals AMD & INTC Face Margin Pressure TooAdvanced Micro Devices, Inc. (AMD - Free Report) and Intel Corporation (INTC - Free Report) are expanding their AI businesses, but rising component costs and production challenges could affect their profitability.
Advanced Micro Devices reported second-quarter 2026 revenues of $11.54 billion, up 13% quarter over quarter, while its non-GAAP gross margin reached 56.2% compared with 55% in the first quarter. Its Data Center revenues climbed 16% sequentially to $6.7 billion, supported by demand for EPYC processors and Instinct GPUs.
However, Advanced Micro Devices’ third-quarter guidance indicates gross margin will remain flat sequentially. For the third quarter, it anticipates non-GAAP gross margin to be 56% in the third quarter. To continue improving margins, AMD must maintain cost control as it scales AI chip production.
Intel’s second-quarter revenues increased 25% to $16.1 billion, while its non-GAAP gross margin improved to 41.8% from 29.7% a year earlier. Still, Intel warned that shortages of memory, substrates and other components could persist into 2027, potentially limiting shipments and increasing costs.
Both companies face cost and supply challenges as AI infrastructure demand grows. NVIDIA has an advantage, with a 75% gross margin in fiscal second-quarter 2027, although its margin is expected to decline sequentially to 74% in the third quarter.
NVIDIA’s Price Performance, Valuation and EstimatesShares of NVIDIA have risen around 14.5% year to date, underperforming the Zacks Computer and Technology sector’s gain of 16.5%.
NVIDIA YTD Price Return Performance
Image Source: Zacks Investment Research
From a valuation standpoint, NVDA trades at a forward price-to-earnings ratio of 15.29, below the sector’s average of 19.25.
NVIDIA Forward 12-Month P/E Ratio
Image Source: Zacks Investment Research
The Zacks Consensus Estimate for NVIDIA’s fiscal 2027 and 2028 earnings implies a year-over-year increase of approximately 95% and 69.3%, respectively. Estimates for fiscal 2027 and 2028 have been revised upward in the past 30 days and seven days, respectively.
Image Source: Zacks Investment Research
NVIDIA currently carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
How many eyeball-grabbing headlines can we stuff into the next few weeks? For tech investors, AI concerns mount, with rising credit default swap prices among the hyperscalers and sagging neocloud equities.
Netflix (NFLX -0.08%) is the dominant streaming video and movie service in its sector, with over 325 million paid memberships as of the end of 2025.It's maintained its position over the years, despite a crowded space with competition from the likes of Walt Disney, which runs Disney+, Hulu, and ESPN+.
Competition in 2026 and beyond, however, is starting to look different, especially as concerns increase around Netflix's ability to keep subscribers engaged. With a new challenger emerging, how it handles the situation will determine the bear and the bull case for the video streaming giant in the years ahead.
Image source: The Motley Fool.
The engagement issue at Netflix
In July, The Wall Street Journal reported that Netflix's subscriber engagement was showing signs of decline and was becoming a more frequent topic of discussion within the company. When Netflix reported its 2026 second-quarter earnings results on July 16, it called engagement "healthy."Still, it also decided to cut back the frequency of its What We Watched report, which provides viewership details, from twice a year to once a year.
In its third-quarter earnings, released on Oct. 20, Netflix addressed engagement concerns again in its shareholder letter:
We know there's some investor concern about our view hours growth. Member response to our 2026 price increases is consistent with prior price changes and our expectations, an indicator that our engagement -- which encompasses quantity, quality and variety of viewing -- remains healthy and that we continue to deliver strong value to members. But we do seek to accelerate growth in view hours as well, and we're confident we'll do that by relentlessly focusing and executing against the aforementioned strategy.
Essentially, the streaming giant is acknowledging the engagement concern and suggesting it has room to do better. That's why, in the battle to win over and keep more people's attention, Netflix's competition is looking less like Disney and more like Alphabet's YouTube.
NFLX Netflix$61.94-$0.05 (-0.08%)
NASDAQ · As of 11:05 AM ET 10/29/26
The bear and bull outlook for Netflix
YouTube offers free videos as well as a premium subscription plan that provides endless hours of unique and niche content to stream. It can be years before new seasons of shows or movies are released on Netflix, but YouTube offers fresh content daily or even hourly from video creators. That's the attention Netflix is battling for now, more than against Disney or any other service.
With this dynamic, long-term, the bear case would be that Netflix doesn't figure out how to compete and keeps losing eyeballs to YouTube. During the 2026 FIFA World Cup, YouTube had over 1.7 billion unique viewers watch World Cup-related videos.The ad revenue it generates is also massive, sitting at $11 billion in just the second quarter of 2026. In comparison, for all of 2026, Netflix expects ad revenue of $2.7 billion.
The bull case is that Netflix is starting to figure out this new landscape, showing signs that it understands the importance of unique content. From football games to boxing events to concerts, it is adding more live-event programming. The only catch is that those types of events cost money to win the rights to, so there will be additional spending needed.
Ultimately, more and more of Netflix's success will be based on how it defends itself against YouTube's hold on attention.
The headline numbers for MasterCard (MA) give insight into how the company performed in the quarter ended September 2026, but it may be worthwhile to compare some of its key metrics to Wall Street estimates and the year-ago actuals.
29% of Americans say they plan to do most of their shopping in early to mid-December this holiday season, compared with 17% on Black Friday
Key points
Bank of America's Holiday Spending Survey finds early to mid-December may surpass Black Friday as the most popular time for holiday shopping.Through a nationally representative survey of 2,000+ U.S. adults, 87% expect their holiday spending to hold steady or decline this year, while just 12% say they plan to spend more.Fewer consumers say they play to use AI or social media platforms for their holiday shopping needs this year., /PRNewswire/ -- Black Friday traditionally marks the unofficial start of the holiday shopping season, however this year consumers are planning to make their biggest holiday shopping push a little later. According to the Bank of America 2026 Holiday Spending Survey, 29% of consumers plan to do most of their holiday shopping in early to mid-December, up from 19% in 2025. Meanwhile, those planning to concentrate most of their shopping around Black Friday fell from 25% to 17%.
Fewer than two out of five (38%) consumers said they have shopped or will shop earlier in 2026, down from 52% in 2025. However, sentiment is running cooler than spending — Bank of America Institute's latest Consumer Checkpoint shows holiday spending is already increasing at a solid rate through September.
"Consumers are being more deliberate this year, from setting their own timelines to staying focused on their budgets," said Mary Hines Droesch, Head of Consumer and Small Business Products and Analytics at Bank of America. "At the same time, our Bank of America spending data shows the season is off to a healthy start."
Budgets hold steady, and shoppers look inward
Nearly half of consumers (48%) expect to spend about the same this holiday season as last year – up from 39% in 2025, with 39% also saying they will spend less on holiday gifts this year – down from 42% in 2025. Meanwhile, only 12% plan to spend more, down from 19% last year. Nearly two-thirds (63%) base holiday spending strictly on their own budget rather than what friends or family spend, rising to 78% of baby boomers.
Consumers' top strategies for avoiding overspending include:
Shopping during sales events (30%).Setting a firm per-person spending limit (27%).Using credit card rewards, points, or cash back (21%).Consumers pull back on AI and social shopping
E-commerce remains the most common way to shop (74%), while 54% still plan to visit brick-and-mortar stores. Overall, consumers are more selective about newer tools:
Nearly three-quarters of consumers (72%) do not plan to use AI tools for holiday shopping, up from 49% in 2025.14% of consumers plan to buy gifts directly through social media, down from 35% in 2025 – with the sharpest drops among younger generations.62% say viral content has no effect on their shopping decisions.Scammers are checking their lists, too
37% of consumers say they have encountered at least one holiday shopping scam tactic in recent years. The most common scams they see include:
Phishing emails posing as retailers (18%)Fake shipping or delivery notifications (16%)Too good to be true deals on gifts or services (16%)In addition, Gen X and baby boomers are more than twice as likely as Gen Z to report retailer phishing attempts.
Credit cards become the preferred holiday payment method
Credit cards are the preferred holiday payment method (over debit cards, cash or Buy Now, Pay Later) for 49% of consumers, up from 32% in 2025. The preference is particularly pronounced among higher-income Americans, 67% of whom favor credit cards, compared with 24% of lower-income consumers.
The shift toward credit cards is also strongest among older consumers, while younger shoppers continue to rely more heavily on debit cards for holiday purchases, with 33% of millennials and 38% of Gen Z citing it as their preferred method.
Frequently asked questions – Bank of America tips for the holiday season
Question: How can consumers protect themselves from holiday shopping scams this season?
Answer: A little extra caution can go a long way. Holiday scams often look like messages you've seen before, including emails that appear to be from retailers, fake shipping or delivery notifications and requests for personal information. These messages often create a false sense of urgency, pressuring you to act immediately. If you receive an unexpected message or notification and something doesn't seem right, don't click on any links. Instead, go directly to the retailer's website or shipping carrier's app to verify it. Pause before you click on anything – that extra moment of caution can help protect both your personal information and your holiday budget. You can always check Bank of America Security Center's Scam Prevention resources for additional tips and tools to stay safe.
Question: How can consumers shop smarter this holiday season?
Answer: Start with a realistic budget and a spending limit for each person on your list. Compare prices, take advantage of seasonal sales, and consider using credit card rewards, points, or cash back on purchases you already planned to make. Visit Better Money Habits for additional tips for staying on budget and getting the most value from your holiday spending.
Question: What's the best way to balance holiday spending with financial goals?
Answer: Before shopping, identify your top financial priorities for the season and set spending limits that support those goals. Don't let social pressure or gift expectations drive your spending, and remember that meaningful gifts aren't defined by price. By planning ahead, taking advantage of deals, and practicing a "pause before you pay" mindset before making purchases, you can stay on budget while reducing financial stress after the holidays.
Question: How can shoppers make planned holiday purchases more rewarding?
Answer: Start by checking whether retailers offer loyalty points, member discounts, or seasonal promotions on purchases you already plan to make. Then, layer those benefits with rewards from a credit card that aligns with your needs and rewards your spending, such as the Bank of America® Customized Cash Rewards card. Cardholders can earn 3% cash back in a category of their choice each month, making it a smart option for holiday shopping needs. Even better, new cardholders can get a 6% cash back bonus offer in their choice category during the first year. Cash rewards can then be redeemed as statement credits or deposited directly into an eligible Bank of America checking or savings account to help offset costs throughout the year.
Methodology
This survey was conducted online from Sept. 10–12, 2026, by Ipsos using the probability-based KnowledgePanel®. This study is based on a nationally representative probability sample of 2,062 adults age 18 or older.
The survey was conducted in English and utilized the Ipsos KnowledgePanel®, the original and most well-established online probability-based panel that is representative of the adult U.S. population. KnowledgePanel uses address-based sampling to randomly recruit U.S. households, including households without existing internet access.
The margin of sampling error for the total sample is ±2.2 percentage points at the 95% confidence level. The margin of sampling error takes into account the design effect, which was 1.02.
The survey data were weighted to match national population benchmarks for gender by age, race/ethnicity, education, Census region, metropolitan status, and household income. Benchmarks for these variables were obtained from the 2025 March Supplement of the Current Population Survey (CPS).
Bank of America
Bank of America is one of the world's leading financial institutions, serving individual consumers, small and middle-market businesses and large corporations with a full range of banking, investing, asset management and other financial and risk management products and services. The company provides unmatched convenience in the United States, serving more than 69 million clients with approximately 3,500 retail financial centers, approximately 15,000 ATMs (automated teller machines) and award-winning digital banking with approximately 60 million verified digital users. Bank of America is a global leader in wealth management, corporate and investment banking and trading across a broad range of asset classes, serving corporations, governments, institutions and individuals around the world. As the #1 small business lender in the United States (FDIC), Bank of America offers industry-leading support to approximately 4 million small business households through a suite of innovative, easy-to-use online products and services. The company serves clients through operations across the United States, its territories and more than 35 countries and/or jurisdictions. Bank of America Corporation stock (NYSE: BAC) is listed on the New York Stock Exchange.
For more Bank of America news, including dividend announcements and other important information, visit the Bank of America newsroom and register for news email alerts.
Reporters may contact
Don Vecchiarello, Bank of America
Phone: 1. 980.387.4899
[email protected]
, /PRNewswire/ -- National securities litigation law firm Hagens Berman alerts investors in Bank of America Corporation (NYSE: BAC) to a securities class action lawsuit filed in federal court against Bank of America and certain senior executives alleging violations of federal securities laws. The firm urges investors with substantial losses to submit their trading information.
Class Period: Aug. 1, 2025 – Oct. 13, 2026Lead Plaintiff Deadline: Dec. 15, 2026Visit: www.hbsslaw.com/bac Contact Email: [email protected] Direct Firm Phone: 844-916-0895Case Overview & Summary of Allegations
The securities class action lawsuit alleges that throughout the Class Period, Defendants made false and/or misleading statements and failed to disclose material adverse facts regarding Bank of America's compliance controls and regulatory risk exposure. Specifically, Defendants failed to disclose that:
Deficient AML & BSA Compliance Controls: Bank of America maintained deficient Bank Secrecy Act (BSA) and Anti-Money Laundering (AML) monitoring systems, underresourcing compliance functions in favor of revenue generation.Underreported Suspicious Transactions: The Bank failed to detect, track, or report over $5 billion in suspicious transactions to the Financial Crimes Enforcement Network (FinCEN), including over $1 billion tied to high-risk illicit finance.Regulatory & Financial Exposure: As a result of these failures, Bank of America faced immense regulatory enforcement actions and multi-billion-dollar penalties, making its prior statements regarding regulatory compliance, risk management, and internal controls materially false and misleading.The Disclosure & Market Impact
On October 13, 2026, the U.S. Department of the Treasury, FinCEN, and the Office of the Comptroller of the Currency (OCC) announced landmark enforcement actions requiring Bank of America to pay over $1.2 billion in penalties for widespread BSA/AML failures and backlog issues.
Following this disclosure, Bank of America's stock price fell sharply by over 4.8%, closing at $51.39 per share on October 14, 2026, wiping out billions of dollars in market value and causing substantial damages to shareholders.
What Can BAC Investors Do?
If you purchased Bank of America Corporation (NYSE: BAC) shares during the Class Period (August 1, 2025 – October 13, 2026) and suffered losses, you may move the Court to serve as Lead Plaintiff no later than December 15, 2026. A Lead Plaintiff is a representative party acting on behalf of other class members in directing the litigation.
Submit your losses now Learn More: Visit www.hbsslaw.com or contact Reed Kathrein at (844) 916-0895 or via email at [email protected]."We're focused on the apparent disparity between the bank's assurances and the Treasury's revelations," said Reed Kathrein, a Hagens Berman partner.
Whistleblowers: Persons with non-public information regarding Bank of America should consider their options to help in the investigation or take advantage of the SEC Whistleblower program. Under the new program, whistleblowers who provide original information may receive rewards totaling up to 30 percent of any successful recovery made by the SEC. For more information, call Reed Kathrein at 844-916-0895 or email [email protected].
About Hagens Berman
Hagens Berman is a global plaintiffs' rights complex litigation firm focusing on corporate accountability. The firm is home to a robust practice and represents investors as well as whistleblowers, workers, consumers and others in cases achieving real results for those harmed by corporate negligence and other wrongdoings. Hagens Berman's team has secured more than $2.9 billion in this area of law. More about the firm and its successes can be found at hbsslaw.com. Follow the firm for updates and news at @ClassActionLaw.
Attorney Advertising. Prior results do not guarantee a similar outcome in any future case.
, /PRNewswire/ -- Pomerantz LLP announces that a class action lawsuit has been filed against Bank of America Corporation ("Bank of America" or the "Company") (NYSE: BAC). Such investors are advised to contact Danielle Peyton at [email protected] or 646-581-9980, (or 888.4-POMLAW), toll-free, Ext. 7980. Those who inquire by e-mail are encouraged to include their mailing address, telephone number, and the number of shares purchased.
The class action concerns whether Bank of America and certain of its officers and/or directors have engaged in securities fraud or other unlawful business practices.
You have until December 15, 2026, to ask the Court to appoint you as Lead Plaintiff for the class if you purchased or otherwise acquired Bank of America securities during the Class Period. A copy of the Complaint can be obtained at www.pomerantzlaw.com.
[Click here for information about joining the class action]
On October 13, 2026, the U.S. Department of the Treasury announced coordinated enforcement actions against Bank of America, N.A. ("BANA") resulting in more than $1.21 billion in penalties and settlements. The Financial Crimes Enforcement Network ("FinCEN") assessed a $1.2 billion penalty, including credit for a $750 million penalty imposed by the OCC, and the Office of Foreign Assets Control separately announced an $11.6 million settlement. In its order, FinCEN stated that BANA admitted that it willfully violated the BSA and missed or delayed detecting and reporting more than $5 billion in suspicious activity. Then, on October 14, 2026, Bank of America reported its third quarter 2026 results, showing that the regulatory settlement charge reduced diluted earnings per share by $0.17.
On this news, Bank of America's stock price fell nearly 5%.
Pomerantz LLP, with offices in New York, Chicago, Los Angeles, London, Paris, and Tel Aviv, is acknowledged as one of the premier firms in the areas of corporate, securities, and antitrust class litigation. Founded by the late Abraham L. Pomerantz, known as the dean of the class action bar, Pomerantz pioneered the field of securities class actions. Today, more than 85 years later, Pomerantz continues in the tradition he established, fighting for the rights of the victims of securities fraud, breaches of fiduciary duty, and corporate misconduct. The Firm has recovered numerous multimillion-dollar damages awards on behalf of class members. See www.pomlaw.com.
Attorney advertising. Prior results do not guarantee similar outcomes.
, /PRNewswire/ -- Pomerantz LLP is investigating claims on behalf of investors of Johnson & Johnson ("J&J" or the "Company") (NYSE: JNJ). Such investors are advised to contact Danielle Peyton at [email protected] or 646-581-9980, ext. 7980.
The investigation concerns whether J&J and certain of its officers and/or directors have engaged in securities fraud or other unlawful business practices.
[Click here for information about joining the class action]
On October 13, 2026, J&J reported its financial results for the third quarter of 2026, which including GAAP net earnings of only $210 million ($0.09 per share) due to multi-billion dollar special charges tied to its ongoing talc litigation settlement. J&J also reported a pronounced, successive revenue miss inside its MedTech business segment, which grew by only 2.5% ($8.64 billion) due to escalating international pricing constraints in China and acute geopolitical disruptions in the Middle East.
On this news, J&J's stock price fell $15.12 per share, or 5.73%, to close at $248.61 per share on October 13, 2026.
Pomerantz LLP, with offices in New York, Chicago, Los Angeles, London, Paris, and Tel Aviv, is acknowledged as one of the premier firms in the areas of corporate, securities, and antitrust class litigation. Founded by the late Abraham L. Pomerantz, known as the dean of the class action bar, Pomerantz pioneered the field of securities class actions. Today, more than 85 years later, Pomerantz continues in the tradition he established, fighting for the rights of the victims of securities fraud, breaches of fiduciary duty, and corporate misconduct. The Firm has recovered numerous multimillion-dollar damages awards on behalf of class members. See www.pomlaw.com.
Attorney advertising. Prior results do not guarantee similar outcomes.
Investors often turn to recommendations made by Wall Street analysts before making a Buy, Sell, or Hold decision about a stock. While media reports about rating changes by these brokerage-firm employed (or sell-side) analysts often affect a stock's price, do they really matter?
Let's take a look at what these Wall Street heavyweights have to say about Johnson & Johnson (JNJ - Free Report) before we discuss the reliability of brokerage recommendations and how to use them to your advantage.
Johnson & Johnson currently has an average brokerage recommendation (ABR) of 1.79, on a scale of 1 to 5 (Strong Buy to Strong Sell), calculated based on the actual recommendations (Buy, Hold, Sell, etc.) made by 26 brokerage firms. An ABR of 1.79 approximates between Strong Buy and Buy.
Of the 26 recommendations that derive the current ABR, 14 are Strong Buy and three are Buy. Strong Buy and Buy respectively account for 53.9% and 11.5% of all recommendations.
Brokerage Recommendation Trends for JNJ
Check price target & stock forecast for Johnson & Johnson here>>>
While the ABR calls for buying Johnson & Johnson, it may not be wise to make an investment decision solely based on this information. Several studies have shown limited to no success of brokerage recommendations in guiding investors to pick stocks with the best price increase potential.
Do you wonder why? As a result of the vested interest of brokerage firms in a stock they cover, their analysts tend to rate it with a strong positive bias. According to our research, brokerage firms assign five "Strong Buy" recommendations for every "Strong Sell" recommendation.
In other words, their interests aren't always aligned with retail investors, rarely indicating where the price of a stock could actually be heading. Therefore, the best use of this information could be validating your own research or an indicator that has proven to be highly successful in predicting a stock's price movement.
With an impressive externally audited track record, our proprietary stock rating tool, the Zacks Rank, which classifies stocks into five groups, ranging from Zacks Rank #1 (Strong Buy) to Zacks Rank #5 (Strong Sell), is a reliable indicator of a stock's near-term price performance. So, validating the Zacks Rank with ABR could go a long way in making a profitable investment decision.
ABR Should Not Be Confused With Zacks RankIn spite of the fact that Zacks Rank and ABR both appear on a scale from 1 to 5, they are two completely different measures.
Broker recommendations are the sole basis for calculating the ABR, which is typically displayed in decimals (such as 1.28). The Zacks Rank, on the other hand, is a quantitative model designed to harness the power of earnings estimate revisions. It is displayed in whole numbers -- 1 to 5.
Analysts employed by brokerage firms have been and continue to be overly optimistic with their recommendations. Since the ratings issued by these analysts are more favorable than their research would support because of the vested interest of their employers, they mislead investors far more often than they guide.
In contrast, the Zacks Rank is driven by earnings estimate revisions. And near-term stock price movements are strongly correlated with trends in earnings estimate revisions, according to empirical research.
In addition, the different Zacks Rank grades are applied proportionately to all stocks for which brokerage analysts provide current-year earnings estimates. In other words, this tool always maintains a balance among its five ranks.
There is also a key difference between the ABR and Zacks Rank when it comes to freshness. When you look at the ABR, it may not be up-to-date. Nonetheless, since brokerage analysts constantly revise their earnings estimates to reflect changing business trends, and their actions get reflected in the Zacks Rank quickly enough, it is always timely in predicting future stock prices.
Is JNJ a Good Investment?Looking at the earnings estimate revisions for Johnson & Johnson, the Zacks Consensus Estimate for the current year has declined 3.2% over the past month to $11.12.
Analysts' growing pessimism over the company's earnings prospects, as indicated by strong agreement among them in revising EPS estimates lower, could be a legitimate reason for the stock to plunge in the near term.
The size of the recent change in the consensus estimate, along with three other factors related to earnings estimates, has resulted in a Zacks Rank #4 (Sell) for Johnson & Johnson. You can see the complete list of today's Zacks Rank #1 (Strong Buy) stocks here >>>>
Therefore, it could be wise to take the Buy-equivalent ABR for Johnson & Johnson with a grain of salt.
Altria (MO) came out with quarterly earnings of $1.52 per share, beating the Zacks Consensus Estimate of $1.51 per share. This compares to earnings of $1.45 per share a year ago.
While the top- and bottom-line numbers for Altria (MO) give a sense of how the business performed in the quarter ended September 2026, it could be worth looking at how some of its key metrics compare to Wall Street estimates and year-ago values.
Delta (DAL) has received quite a bit of attention from Zacks.com users lately. Therefore, it is wise to be aware of the facts that can impact the stock's prospects.
On its third-quarter 2026 earnings call, held on Oct. 28, 2026, Ford (F +3.14%) revised its full-year adjusted earnings before interest and taxes (EBIT) guidance to between $10.5 billion and $11 billion, raising the low end of the range. The automaker is directing investment toward commercial services and grid-scale energy storage while working to reduce electric vehicle costs. Three things management said stand out.
1. Ford Energy Targets Utility Battery Storage GrowthExpanding into grid-scale battery storage allows the automaker to monetize its battery manufacturing capacity in Kentucky and Michigan. Securing power grid and data center customers provides a new revenue stream beyond traditional vehicle sales. 80% of Ford Energy's 2028 capacity is contracted or in late-stage negotiations.
We are building a diverse customer base across solar, grid support and data centers, and we expect our 2028 capacity to be fully committed by Q1 of next year.
-- James Farley, President and Chief Executive Officer2. Affordable Electric Vehicles Focus on Cost ControlDeveloping a low-cost electric vehicle platform helps the company target price-sensitive buyers while protecting profit margins. Manufacturing cost reductions and simplified architectures are essential for achieving profitability in electric models by 2029.
The launch [of the Fathom] remains on track for fourth quarter next year.
-- James Farley, President and Chief Executive Officer3. Software and Parts Drive Higher-Margin GrowthExpanding commercial software subscriptions and replacement parts operations creates recurring, high-margin cash flow. Connected vehicle tools increase customer retention at dealerships, helping offset commodity cost pressures in core vehicle manufacturing.
These auto-adjacent businesses were significant drivers of the quarter's strong performance, contributing approximately 10% of the quarter's revenue at strong margins.
-- Sherry House, Chief Financial OfficerLooking AheadCommercial fleet demand remains robust, and manufacturing efficiencies are offsetting higher commodity expenses. Strong truck pricing and growing subscription services support long-term profit stability.
Our third-quarter results reflect the deliberate actions we're taking to improve profitability and deliver consistent financial returns.
-- Sherry House, Chief Financial OfficerFuture growth relies on executing new vehicle launches while maintaining pricing discipline. Balancing capital investments across electric vehicles, software, and energy storage remains the central strategic focus.
The objective is a more profitable, capital-efficient and resilient Ford, one that achieves 8% adjusted EBIT margins by 2029 and deliver sustained earnings, cash flow and returns to our shareholders over time.
-- James Farley, President and Chief Executive OfficerThe Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.
Ford Motor Company (F +2.97%) reported stronger-than-expected earnings results for its third quarter of the year and also slightly raised its full-year guidance.
The stock popped about 2% on Oct. 28, the day it reported earnings, but is still significantly trailing the broader market this year.
The auto giant reported an operating profit of $2.7 billion, $300 million ahead of Wall Street consensus estimates, while total revenue was $49.5 billion, beating estimates by $1.2 billion.
After raising its full-year guidance for adjusted earnings before interest and taxes (EBIT) in the second quarter, Ford once again raised its full-year EBIT guidance slightly to a range of $10.5 billion to $11 billion. Previously, the range had been $10 billion to $11 billion.
How is Ford's looking after the better-than-expected results?
Image source: The Motley Fool.
Higher commodity costs and continuing to right-size EV businessFord's more traditional automobile segment generated EBIT of nearly $1.4 billion, down about 10% year over year.
Meanwhile, the company's electric vehicle segment generated an EBIT loss of over $1 billion, which is a strong improvement from the same period a year ago. Ford's commercial segment reported EBIT of roughly $1.67 billion, down year over year.
While the stock rose following the earnings report, it may have risen further had it not been for concerns about higher commodity, logistics, and memory costs.
On the company's earnings call, Ford's CFO Sherry House said commodity headwinds are now approaching $2.5 billion year-over-year, due to pressure on input costs, while high gas prices impact the company's freight and energy costs.
F Ford Motor Company$12.31+$0.36 (+2.97%)
NYSE · As of 11:03 AM ET 10/29/26
Furthermore, Ford expects these headwinds, as well as higher memory and logistics costs, to result in a $2 billion headwind in 2027. The company expects earnings in 2027 to be roughly in line with this year.
Ford also continues to make progress right-sizing its EV business. In late 2025, the company announced that it would scale back its money-losing EV business to focus on hybrid and more affordable EVs. Ford recorded a $19.5 billion loss as a result of this decision.
In the third quarter, losses in the EV business narrowed, despite Ford reporting a 31% dip in revenue year over year.
House said on the earnings call that the company is targeting the EV business to breakeven by 2029, although she doesn't expect a linear move to that goal, with higher expenses in 2027 and a "step-function change in profitability" in the first half of 2028.
Is the stock a buyFollowing earnings, Goldman Sachs analyst Mark Delaney lowered his price target by $2 to $12 per share and maintained a neutral rating on the stock, primarily due to the higher, commodity, logistics, and memory costs expected in 2027.
One of the main draws of Ford is the company's roughly 5% trailing 12-month dividend.
Through the first nine months of the year, Ford has generated adjusted free cash flow of nearly $5.7 billion, while paying out about $2.4 billion in dividends.
The company has had to cut its dividend a few times since the Great Recession. The dividend looks safe right now, but the company is still a work-in-progress from an operational perspective, so I'm overall neutral on the stock right now.
NYSE issues a pre-market daily advisory direct from the trading floor. NEW YORK, Oct. 29, 2026 /PRNewswire/ -- The New York Stock Exchange (NYSE) provides a daily pre-market update directly from the NYSE Trading Floor.
Here at Zacks, we offer our members many different opportunities to take full advantage of the stock market, as well as how to invest in ways that lead to long-term success.
The Zacks Premium service makes this easier. It features daily updates of the Zacks Rank and Zacks Industry Rank; full access to the Zacks #1 Rank List; Equity Research reports; and Premium stock screens like the Earnings ESP filter. All of these can help you quickly identify what stocks to buy, what to sell, and what are today's hottest industries.
Also included in Zacks Premium is the Focus List. This is a long-term portfolio of top stocks that have all the traits to beat the market.
Breaking Down the Zacks Focus ListIf you could get access to a curated list of stocks to kickstart your investment portfolio, wouldn't you jump at the chance to take a peek?
Enter the Zacks Focus List. It's a portfolio made up of 50 stocks that are set to beat the market over the next 12 months; each company selected serves as a foundation for long-term investors looking to create an individual portfolio.
What makes the Focus List even more helpful is that each selection is accompanied by a full Zacks Analyst Report, which explains the reasoning behind every stock's selection and why we believe it's a good pick for the long-term.
The portfolio's past performance only solidifies why investors should consider it as a starting point. For 2020, the Focus List gained 13.85% on an annualized basis compared to the S&P 500's return of 9.38%. Cumulatively, the portfolio has returned 2,519.23% while the S&P returned 854.95%. Returns are for the period of February 1, 1996 to March 31, 2021.
Focus List MethodologyWhen stocks are picked for the Focus List, it reflects our enduring reliance on the power of earnings estimate revisions.
Brokerage analysts are in charge of determining a company's growth and profitability expectations, or earnings estimates. These analysts work together with company management to evaluate all factors that may affect future earnings, like interest rates, the economy, and sector and industry optimism.
What a company will earn down the road also needs to be taken into consideration, and this is why earnings estimate revisions are so important.
Stocks that receive upward earnings estimate revisions are more likely to receive even more upward changes in the future. For example, if an analyst raised their estimates last month, they're more likely to do it again this month, and other analysts are likely to do the same.
Harnessing the power of earnings estimate revisions is where the Zacks Rank comes in. The Zacks Rank, which is a unique, proprietary stock-rating model, employs earnings estimate revisions to make it easier to build a winning portfolio.
The Zacks Rank consists of four main pillars: Agreement, Magnitude, Upside, and Surprise. Each one is given a raw score, which is recalculated every night and compiled into the Rank. Then, stocks are classified into five groups, ranging from "Strong Buy" to "Strong Sell," using this data.
The Focus List is comprised of stocks hand-picked from a long list of #1 (Strong Buy) or #2 (Buy) ranked companies, meaning that each new addition boasts a bullish earnings consensus among analysts.
Because stock prices react to revisions, buying stocks with rising earnings estimates can be very profitable. Focus List stocks offer investors a great opportunity to get into companies whose future earnings estimates will be raised, potentially leading to price momentum.
Focus List Spotlight: Goldman Sachs (GS - Free Report) Founded in 1869, The Goldman Sachs Group, Inc. is a leading global financial holding company providing investment banking (IB), securities, investment management and consumer banking services to a diversified client base. The company is headquartered in New York, with offices in major financial centers globally.
On July 11, 2018, GS was added to the Focus List at $226.85 per share. Shares have increased 307.83% to $925.17 since then, and the company is a #2 (Buy) on the Zacks Rank.
For fiscal 2026, six analysts revised their earnings estimate upwards in the last 60 days, and the Zacks Consensus Estimate has increased $2 to $70.89. GS boasts an average earnings surprise of 25.8%.
Earnings for GS are forecasted to see growth of 38.1% for the current fiscal year as well.
Reveal Winning StocksUnlock all of our powerful research, tools and analysis, including the Zacks #1 Rank List, Equity Research Reports, Zacks Earnings ESP Filter, Premium Screener and more, as part of Zacks Premium. You'll quickly identify which stocks to buy, hold and sell, and target today's hottest industries, to help improve the performance of your portfolio. Gain full access now >>
It's not even Halloween, but McDonald's is just days away from rolling out its new holiday menu. And this year, it includes a number of seasonal beverages, just like Starbucks's popular annual holiday offerings.
Xerox Holdings Corporation (XRX - Free Report) came out with quarterly earnings of $0.06 per share, beating the Zacks Consensus Estimate of a loss of $0.07 per share. This compares to earnings of $0.2 per share a year ago. These figures are adjusted for non-recurring items.
This quarterly report represents an earnings surprise of +185.71%. A quarter ago, it was expected that this company would post earnings of $0.06 per share when it actually produced earnings of $0.36, delivering a surprise of +500%.
Over the last four quarters, the company has surpassed consensus EPS estimates three times.
Xerox, which belongs to the Zacks Office Supplies industry, posted revenues of $1.87 billion for the quarter ended September 2026, surpassing the Zacks Consensus Estimate by 0.21%. This compares to year-ago revenues of $1.96 billion. The company has topped consensus revenue estimates three times over the last four quarters.
The sustainability of the stock's immediate price movement based on the recently-released numbers and future earnings expectations will mostly depend on management's commentary on the earnings call.
Xerox shares have added about 17.7% since the beginning of the year versus the S&P 500's gain of 13.1%.
What's Next for Xerox?While Xerox has outperformed the market so far this year, the question that comes to investors' minds is: what's next for the stock?
There are no easy answers to this key question, but one reliable measure that can help investors address this is the company's earnings outlook. Not only does this include current consensus earnings expectations for the coming quarter(s), but also how these expectations have changed lately.
Empirical research shows a strong correlation between near-term stock movements and trends in earnings estimate revisions. Investors can track such revisions by themselves or rely on a tried-and-tested rating tool like the Zacks Rank, which has an impressive track record of harnessing the power of earnings estimate revisions.
Ahead of this earnings release, the estimate revisions trend for Xerox was mixed. While the magnitude and direction of estimate revisions could change following the company's just-released earnings report, the current status translates into a Zacks Rank #3 (Hold) for the stock. So, the shares are expected to perform in line with the market in the near future. You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here.
It will be interesting to see how estimates for the coming quarters and the current fiscal year change in the days ahead. The current consensus EPS estimate is $0.27 on $1.96 billion in revenues for the coming quarter and $0.17 on $7.59 billion in revenues for the current fiscal year.
Investors should be mindful of the fact that the outlook for the industry can have a material impact on the performance of the stock as well. In terms of the Zacks Industry Rank, Office Supplies is currently in the top 40% of the 250 plus Zacks industries. Our research shows that the top 50% of the Zacks-ranked industries outperform the bottom 50% by a factor of more than 2 to 1.
One other stock from the broader Zacks Industrial Products sector, LiqTech International, Inc. (LIQT - Free Report) , is yet to report results for the quarter ended September 2026.
This company is expected to post quarterly loss of $0.06 per share in its upcoming report, which represents a year-over-year change of +60%. The consensus EPS estimate for the quarter has remained unchanged over the last 30 days.
LiqTech International, Inc.'s revenues are expected to be $6 million, up 57.5% from the year-ago quarter.
Xerox Holdings Corporation (XRX - Free Report) reported $1.87 billion in revenue for the quarter ended September 2026, representing a year-over-year decline of 4.7%. EPS of $0.06 for the same period compares to $0.20 a year ago.
The reported revenue represents a surprise of +0.21% over the Zacks Consensus Estimate of $1.86 billion. With the consensus EPS estimate being -$0.07, the EPS surprise was +185.71%.
While investors closely watch year-over-year changes in headline numbers -- revenue and earnings -- and how they compare to Wall Street expectations to determine their next course of action, some key metrics always provide a better insight into a company's underlying performance.
Since these metrics play a crucial role in driving the top- and bottom-line numbers, comparing them with the year-ago numbers and what analysts estimated about them helps investors better project a stock's price performance.
Here is how Xerox performed in the just reported quarter in terms of the metrics most widely monitored and projected by Wall Street analysts:
Revenues- Sales: $954 million compared to the $941.29 million average estimate based on two analysts. The reported number represents a change of -3.9% year over year.Revenue- Equipment Sales- Entry: $156 million versus $112.6 million estimated by two analysts on average. Compared to the year-ago quarter, this number represents a +31.1% change.Revenue- Equipment Sales- Mid-range: $151 million compared to the $187.73 million average estimate based on two analysts. The reported number represents a change of -32% year over year.Revenue- Equipment Sales- High-end: $81 million versus $50.26 million estimated by two analysts on average. Compared to the year-ago quarter, this number represents a +107.7% change.Revenue- Print and Other- Equipment sales: $393 million compared to the $354.68 million average estimate based on two analysts. The reported number represents a change of +2.6% year over year.Revenue- Equipment Sales: $393 million versus $354.68 million estimated by two analysts on average. Compared to the year-ago quarter, this number represents a +2.6% change.Revenue- Print and Other: $1.69 billion versus $1.66 billion estimated by two analysts on average. Compared to the year-ago quarter, this number represents a -2.9% change.Revenue- Equipment Sales- Other: $5 million versus the two-analyst average estimate of $4.1 million. The reported number represents a year-over-year change of +66.7%.Revenue- IT Solutions: $187 million versus the two-analyst average estimate of $206.3 million. The reported number represents a year-over-year change of -17.3%.Revenues- Services, maintenance, rentals and other: $914 million versus the two-analyst average estimate of $924.43 million. The reported number represents a year-over-year change of -5.6%.Revenue- Print and Other- Post sale revenue: $1.3 billion versus $1.23 billion estimated by two analysts on average. Compared to the year-ago quarter, this number represents a -4.5% change.View all Key Company Metrics for Xerox here>>>
Shares of Xerox have returned -11.9% over the past month versus the Zacks S&P 500 composite's +0.9% change. The stock currently has a Zacks Rank #3 (Hold), indicating that it could perform in line with the broader market in the near term.
